Zaretsky et al v. Gemological Institute Of America, Inc. et al

Filing 89

OPINION AND ORDER. For the foregoing reasons, GIA's motion to dismiss the tort claims against it is GRANTED. A conference is scheduled for May 9, 2014 at 4:30 p.m. (Signed by Judge Shira A. Scheindlin on 4/28/2014) (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

----------------------------------------------------

~

STEVEN ZARETSKY and SUZANNE
ZARETSKY,
OPINION AND
ORDER

Plaintiffs,
- against -

14 Civ. 1113 (SAS)

GEMOLOGICAL INSITUTE OF
AMERICA, INC., et al.,
Defendants.

----------------------------------------------------

~

SHIRA A. SCHEINDLIN, U.S.D.J.:
I.

INTRODUCTION
Steven Zaretsky ("Zaretsky") and his wife Suzanne bring this suit

against four companies in the diamond industry and the Gemological Institute of
America, Inc. ("GIA"), a nonprofit company, based on GIA's failure to return a
7.35 carat, pear-shaped diamond (the "diamond") that Zaretsky's jeweler delivered
to GIA for certification and appraisal. 1 GIA is holding the diamond until its
ownership can be determined because it believes the same diamond was reported

Jurisdiction is premised on diversity of citizenship.
1

stolen nine years before it was purchased by Suzanne Zaretsky's father.
Consistent with claims of disputed ownership, plaintiffs bring claims
for declaratory judgment and a writ of replevin against all defendants. But they
also bring conversion, breach of fiduciary duty, and intentional infliction of
emotional distress claims (the "tort claims") against GIA. GIA moves to dismiss
the tort claims pursuant to Federal Rule of Civil Procedure l 2(b )( 6). For the
reasons that follow, GIA's motion to dismiss the tort claims is GRANTED.
II.

BACKGROUND

A.

Procedural History

This case was commenced on June 19, 2013, in the United States
District Court for the District of New Jersey, and assigned to Judge Faith S.
Hochberg. GIA moved to dismiss pursuant to both Rule 12(b)( 6) and 12(b)(3 ).
On February 20, 2014, Judge Hochberg granted GIA's motion pursuant to Rule
12(b)(3), without deciding GIA's motion under Rule 12(b)(6). Instead of
dismissing the case, Judge Hochberg transferred it to this District pursuant to Title
28, United States Code, section 1406.
On April 16, 2014, plaintiffs sought leave to file a first amended
complaint ("Complaint"). I granted plaintiffs' motion with the understanding that
GIA's pending motion under Rule 12(b)(6) would be applied to the first amended

2

complaint. On April 23, 2014, plaintiffs filed the Complaint.

B.

Facts 2
1.

Delivery of the Diamond to GIA and GIA's Refusal to
Return It to Plaintiffs

On December 10, 2012, Zaretsky brought the diamond to nonparty K
& D Jewelers in order to have it appraised for insurance purposes. 3 After K & D

Jewelers recommended that Zaretsky obtain an appraisal and certification from
GIA, Zaretsky authorized K & D Jewelers to submit the diamond to GIA. 4
Zaretsky was told that the certification process would take five days. 5
On December 20, 2012, GIA informed Zaretsky that it would not
release the diamond because a diamond with similar characteristics had been
reported stolen in March 2003. 6 Zaretsky demanded the return of the diamond, but

2

Unless otherwise indicated, the facts are drawn from the Complaint.
Well-pleaded factual allegations are presumed true for the purposes of this motion.
See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). However, allegations in the
Complaint that consist of conclusory statements or threadbare recitals of causes of
action are not entitled to the presumption of truth. See Kirkendall v. Halliburton,
707 F.3d 173, 175 n.l (2d Cir. 2013); Bigio v. Coca-Cola Co., 675 F.3d 163, 173
(2d Cir. 2012) (citing Iqbal, 556 U.S. at 678).
3

See Complaint if 9.

4

See id.

ifif 10-11.

5

See id.

if 11.

6

See id.

ifif 12-13.
3

GIA refused based on its disputed ownership. 7 GIA failed to release information
about the party reporting the diamond as stolen unless the Zaretskys provided
proof of their identities. 8 Even after this information was provided, GIA refused to
provide any information unless the Zaretskys signed a '"Consent and Release'
Agreement. " 9
On February 13, 2013, GIA provided Zaretsky with a Consent
Agreement and a Client Agreement. Io GIA indicated that the information Zaretsky
requested would be given to him following execution of the agreements. II
Plaintiffs' counsel objected to the terms of the agreements, I2 and then negotiated
with GIA for several weeks. I3 The Complaint alleges that during this time, "GIA
was less than forthcoming and deliberate in responding to requests, from counsel to
the Zaretskys, as well as working to resolve the issues regarding the agreements."I 4

if 16.

7

See id.

8

See id.

9

/d.if 17.

IO

See id.

II

See id.

12

See id.

if 19.

13

See id.

if 20.

14

Id.

if 18.

if 21.
4

On March 27, 2013, Zaretsky forwarded an executed "Release Letter"
to GIA. 15 The Release Letter indicates that:
[K & DJ has submitted to GIA the above-referenced diamond (the
"Submitted Stone") requesting GIA to perform GIA services.
GIA has determined that the Submitted Stone is the same or
substantially similar to a stone that was reported by one or more
third parties (the "Reporting Parties") to GIA and/or law
enforcement as lost or stolen (the "Reported Stone"). GIA refers
to this as a "Competing Claim of Ownership Matter." 16
On April 17, 2013, GIA issued a Notice of Competing Claims "identifying the
party reporting the Stone as stolen as well as outlining terms to which the parties
must conform in order for the Stone to be retumed." 17 The notice named Eve
Goldberg as the party reporting the diamond as stolen. 18 The plaintiffs believe that
Eve Goldberg is representing a claim of ownership on behalf of the William
Goldberg Diamond Corporation ("WGDC"). 19

2.

15

See id.

Plaintiffs' Understanding of GIA's Role

if 22.

16

3/12/13 Letter from GIA to K & D Jewelers and the Zaretskys,
executed by K & D Jewelers and Zaretsky, Exhibit B to the Complaint ("Release
Letter"). Although Zaretsky executed the Release Letter he struck out certain
terms.
17

Complaint if 23.

18

See id.

19

See id.

if 24.

5

During the course of their dealings with GIA, plaintiffs believed that
GIA was acting as an '"escrow agent,' holding the [diamond], until the issue of the
competing claim could be resolved." 20 However, Zaretsky later learned that
"William Goldberg had contributed a significant charitable gift to GIA, upon his
demise, to create the William Goldberg Endowed Scholarship Fund." 21 As of
March 2005, WGDC had contributed $350,000 to GIA, an amount which has
increased over time. 22 As a result, Zaretsky "no longer feels that GIA is a
disinterested party and further feels that GIA may be acting to subvert the
Zaretskys' s possessory rights [in] the stone in favor of the William Goldberg
Diamond Corporation. " 23
3.

Ownership of the Diamond

On May 29, 2002, GIA certified a 7.44 carat, pear-shaped diamond for
WGDC. 24 On March 19, 2003, WGDC sent GIA a copy of a police report
indicating certain items of jewelry, including a 7.44 carat stone, were stolen from

20

Id.

if 25.

21

Id.

if 26.

22

See id.

23

Id.

24

See 5129102 GIA Report for William Goldberg, Exhibit G to the

if 27.

Complaint (the "WGDC Certification").
6

WGDC in January 2003. 25 On March 24, 2003, GIA certified a 7.35 carat pearshaped diamond for defendant Louis E. Newman, Inc. 26 Suzanne Zarestky's father
purchased the diamond on December 23, 2003, from defendant Stanley & Son
Jewelers, Inc. 27 Plaintiffs believe that Stanley & Son Jewelers obtained the
diamond from Louis E. Newman. 28
"GIA alleges that the [diamond] submitted by Plaintiffs is the 'same
or substantially similar,' to a diamond which GIA certified to Defendant WGDC
on May 29, 2002 .... " 29 However, the Complaint states that "the measurements,
weight, and other pertinent dimensions between" the stolen diamond and plaintiffs'
diamond "are not, in fact, similar as GIA has represented." 30

III.

MOTION TO DISMISS STANDARD

A.

Motion to Dismiss

25

See Complaint ii 32; 313103 New York City Police Department

Complaint faxed from WGDC to GIA on 3/19/03, Exhibit F to the Complaint (the
"Police Report").
26

See 3124103 GIA Report for Louis E. Newman, Inc., Exhibit E to the

Complaint.
27

See Complaint iii! 28-29.

28

See id.

ii 30.

29

See id.

ii 34.

30

Id.

ii 35.
7

In deciding a motion to dismiss under Rule l 2(b )( 6), the court must
"accept[] all factual allegations in the complaint as true, and draw[] all reasonable
inferences in the plaintiff's favor." 31 The court evaluates the complaint under the
"two-pronged approach" set forth in Iqbal. 32 First, a court may "identify[]
pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth." 33 "Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice" to withstand a motion to
dismiss. 34 Second, "[w]hen there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they plausibly give rise to
an entitlement for relief." 35
A claim is facially plausible "when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable

31

Freidus v. Barclays Bank PLC, 734 F.3d 132, 137 (2d Cir. 2013)
(citing Gorman v. Consolidated Edison Corp., 488 F.3d 586, 591-92 (2d Cir.
2007)).
32

See Iqbal, 556 U.S. at 679.

33

Bigio, 675 F.3d at 173 (citing Iqbal, 556 U.S. at 678).

34

Id.

35

Taveras v. UBS AG, 513 Fed. App'x 19, 22 (2d Cir. 2013) (citing
Iqbal, 556 U.S. at 679).
8

for the misconduct alleged." 36 Plausibility "is not akin to a probability
requirement," rather, plausibility requires "more than a sheer possibility that a
defendant has acted unlawfully." 37
In considering a motion to dismiss for failure to state a claim pursuant
to Rule 12(b)(6), a district court may consider "only the complaint, ... any
documents attached thereto or incorporated by reference and documents upon
which the complaint relies heavily." 38 Allegations in the complaint that are
"contradicted by more specific allegations or documentary evidence" are not
entitled to a presumption of truthfulness. 39

B.

Pleading Requirements
1.

Rule 8

Rule 8(a)(2) requires "a short and plain statement of the claim
showing that the pleader is entitled to relief." To survive a Rule 12(b)(6) motion,

36

Iqbal, 556 U.S. at 678 (citing Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 556 (2007)).
37

Id.

38

Building Indus. Elec. Contractors Ass 'n v. City ofNew York, 678 F .3d
184, 187 (2d Cir. 2012) (citing In re Citibank ERISA Litig., 662 F.3d 128, 135 (2d
Cir. 2011) (quotation marks omitted)).
39

Kirkendall, 707 F .3d at 175 n. l (citing L-7 Designs, Inc. v. Old Navy,
LLC, 647 F.3d 419, 422 (2d Cir. 2011)).
9

the allegations in the complaint must meet the plausibility standard, as discussed
above. 40
III.

APPLICABLE LA W41
A.

Conversion

Under New York law, "[c]onversion is the unauthorized assumption
and exercise of the right of ownership over goods belonging to another to the
exclusion of the owner's rights." 42 "'Two key elements of conversion are (1)
plaintiff's possessory right or interest in the property and (2) defendant's dominion
over the property or interference with it, in derogation of plaintiff's rights.' " 43

40

See Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 570).

41

A federal court sitting in diversity applies the choice-of-law rules of
the state in which it sits. See, e.g., Finance One Pub. Co. Ltd. v. Lehman Bros.
Special Fin., Inc., 414 F.3d 325, 333 (2d Cir. 2005). "While New York has
adopted the 'paramount interest' test for choice-of-law questions, lex loci deliciti
remains the general rule in tort cases to be displaced only in extraordinary
circumstances." MWL Brasil Rodas & Eixos LTDA v. K-IV Enters. LLC, 661 F.
Supp. 2d 419, 428 (S.D.N.Y. 2009) (quotation marks omitted). Here, the alleged
torts took place in New York. See Zaretsky v. Gemological Institute ofAmerica,
Inc., No. 13 Civ. 3807, 2014 WL 683983, at *3 (D.N.J. Feb. 20, 2014) ("The
parties do not dispute that the facts giving rise to this cause of action occurred, not
in New Jersey, but in New York."). Accordingly, the Court will apply New York
law.
42

Thyrojf v. Nationwide Mutual Ins. Co., 460 F.3d 400, 403-04 (2d Cir.

2006).
43

Edidin v. Uptown Gallery, Inc., No. 09 Civ. 7829, 2010 WL 1252666,
at *2 (S.D.N.Y. Apr. 3, 2010) (quoting Colavito v. NY Organ Donor Network,
10

Significantly, '"where one is rightfully in possession of property, one's continued
custody of the property and refusal to deliver it on demand of the owner until the
owner proves his right to it does not constitute a conversion. "'44 In addition,"[ a]
conversion claim may only succeed if the party alleges a wrong that is distinct
from any contractual obligations." 45
B.

Breach of Fiduciary Duty
A claim for breach of fiduciary duty involves three elements: "breach

by a fiduciary of a duty owed to plaintiff; defendant's knowing participation in the
breach; and damages. " 46 There are four elements essential to the establishment of a
fiduciary relationship: "(1) [t]he vulnerability of one party to the other which (2)
results in the empowerment of the stronger party by the weaker which (3)
empowerment has been solicited or accepted by the stronger party and (4) prevents
the weaker party from effectively protecting itself." 47 "Generally, where parties

Inc., 8 N.Y.3d 43, 50 (2006)).
44

Rezende v. Citigroup Global Markets, Inc., No. 09 Civ. 9392, 2010
WL 4739952, at *4 (S.D.N.Y. Nov. 18, 2010) (quoting Trans-World Trading, Ltd.
v. North Shore Univ. Hosp. at Plainview, 882 N.Y.S.2d 685, 687 (2d Dep't 2009)).
45

Command Cinema Corp. v. VGA Labs. Inc., 464 F. Supp. 2d 191, 199
(S.D.N.Y. 2006).
46

SCS Commc'ns, Inc. v. Herrick Co., 360 F.3d 329, 342 (2d Cir. 2004).

47

Manhattan Motorcars, Inc. v. Automobili Lamborghini, S.p.A.,
244 F.R.D. 204, 214-15 (S.D.N.Y. 2007) (quotation marks omitted).
11

deal at arms-length in a commercial transaction, no relation of confidence or trust
sufficient to find the existence of a fiduciary relationship will arise absent
extraordinary circumstances. " 48
A fiduciary is obliged to exercise the "highest degree of good faith,
honesty, integrity, fairness and fidelity" in its dealings with those to whom the duty
is owed. 49 It is "elemental that a fiduciary owes a duty of undivided and undiluted
loyalty to those whose interests the fiduciary is to protect." 50 Once a fiduciary duty
is established, it is so "inflexible" that the fiduciary must avoid not only
self-dealing, but also "situations in which a fiduciary's personal interest possibly
conflicts with the interest of those owed a fiduciary duty." 51

C.

Intentional Infliction of Emotional Distress
Under New York law, intentional infliction of emotional distress has

four elements: "(1) extreme and outrageous conduct; (2) intent to cause, or reckless
disregard of a substantial probability of causing, severe emotional distress; (3) a
causal connection between the conduct and the injury; and (4) severe emotional

48

Id. at 215 (quotation marks omitted).

49

US. Ice Cream Corp. v. Bizar, 659 N.Y.S.2d 492, 492 (2d Dep't

1997).
50

Birnbaum v. Birnbaum, 73 N.Y.2d 461, 466 (1989).

51

Id.
12

distress." 52 "To survive a motion to dismiss, '[t]he conduct alleged must be such
that it can be fairly characterized as egregious, utterly despicable, heartless or
flagrant. "' 53 Generally, New York courts only sustain intentional infliction of
emotional distress claims where there is "some combination of public humiliation,
false accusations of criminal or heinous conduct, verbal abuse or harassment,
physical threats, permanent loss of employment, or conduct contrary to public
policy." 54

IV.

DISCUSSION
The gravamen of this case is identifying the rightful owner of the

52

Stuto v. Fleishman, 164 F.3d 820, 827 (2d Cir. 1999).

53

Harris v. Queens County Dist. Attorney's Office, No. 08 Civ. 1703,
2009 WL 3805457, at* 12 (E.D.N.Y. Nov. 9, 2009) (quoting Lydeatte v. Bronx
Overall Economic Development Corp., No. 00 Civ. 5433, 2001 WL 180055, at *2
(S.D.N.Y. Feb. 22, 2001)). Accord Stuto, 164 F.3d at 827 ("Liability has been
found only where the conduct has been so outrageous in character, and so extreme
in degree, as to go beyond all possible bounds of decency, and to be regarded as
atrocious, and utterly intolerable in a civilized society.") (quotation marks
omitted); Conboy v. AT & T Corp., 84 F. Supp. 2d 492, 507 (S.D.N.Y. 2000), ajf'd,
241F.3d242 (2d Cir. 2001) ("Satisfying the first element of this claim is difficult,
even at the pleadings stage."); Kiser v. HSH Nordbank, No. 09 Civ. 8849, 2010
WL 286647, at *2 (S.D.N.Y. Jan. 20, 2010) ("Indeed, the standard for the first
element is so demanding that of the intentional infliction of emotional distress
claims considered by the New York Court of Appeals, every one has failed because
the alleged conduct was not sufficiently outrageous.") (quotation marks and
alterations omitted).
54

Stuto, 164 F.3d at 828.
13

diamond. Rather than focus on that goal, plaintiffs contend that GIA has
committed malfeasance, going so far as to assert a claim for intentional infliction
of emotional distress. However, as the Release Letter and the Complaint indicate,
GIA is simply holding the diamond in a safe location pending a determination of
ownership by a court of competent jurisdiction. Under these circumstances,
plaintiffs have failed to plausibly state a claim for conversion, breach of fiduciary
duty, or intentional infliction of emotional distress against GIA.

A.

Plaintiffs' Fail to State a Claim for Conversion Against GIA
The Complaint states that Zaretsky authorized K & D Jewelers to

transfer the diamond to GIA. 55 The Complaint does not allege that GIA asserts an
ownership interest in the diamond or that GIA has released the diamond to WGDC
or another party. Instead, it states that after Zaretsky demanded the return of the
diamond, GIA refused because it believed the diamond may have been stolen, and
sought to establish a framework for the resolution of the disputed claim of
ownership. 56
The Release Letter executed by Zaretsky illustrates the role of GIA
with respect to the diamond. Zaretsky struck out the portion of the Release Letter

55

See Complaint if 11.

56

See, e.g., id.

iii! 13-24.
14

agreeing to "be bound by certain of the provisions of GIA's Client Agreement and
certain other terms and conditions set forth" on Exhibit A to the Release Letter (the
"Terms and Conditions"). 57 However, the remaining portion of the Release Letter
provides that:
In connection with this Competing Claim of Ownership Matter,
the Zaretsky's [stet] agree to: (i) ... Exhibit A attached hereto (the
"Terms and Conditions"), and (ii) the disclosure of the
Zaretsky's [stet] [identifying information] ... in order to resolve
this Competing Claim of Ownership Matter. 58
The Terms and Conditions indicate, among other things, that when there are
competing claims of ownership, "GIA may ... hold such Article for a reasonable
period of time and inform the applicable law enforcement agency and the
Reporting Party." 59 Moreover, the Terms and Conditions contemplate that
competing claimants will either settle the claim or commence suit to determine the
ownership of the disputed item. 60
Plaintiffs argue that GIA' s "intentional refusal to return possession of

57

Release Letter. The issue of whether the Release Letter is a binding
contract is not before the Court. However, the parties do not appear to contend that
it is. See, e.g., Brief in Support of the Gemological Institute of America, Inc. 's
Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(3) and 12(b)(6) at 12.
58

Release Letter.

59

Id.

60

See id.
15

the Diamond to the Plaintiffs, despite demand and conclusive proof of ownership
and proof of chain of title ... constitutes a prima facie case for conversion against"
GIA. 61 However, this argument ignores the circumstances alleged in the
Complaint, as well as the Release Letter executed by Zaretsky, the WGDC
Certification, and the Police Report. While the Complaint alleges plaintiffs bought
the Diamond, that is not the same as alleging conclusive ownership. The Police
Report and WGDC Certification attached to the Complaint preclude an inference
that plaintiffs had clear title to the diamond. Nor can I draw an inference that GIA
is liable for conversion based on its decision to direct Zaretsky to file suit in
replevin naming GIA as a party rather than simply turning the diamond over upon
request.
In short, the Complaint and the documents attached to it indicate that
GIA is not claiming ownership of the diamond and is instead holding the diamond
until the disputed ownership can be resolved either through settlement or by court
order. These allegations do not permit an inference that GIA has acted
unreasonably, 62 or wrongfully refused to return the diamond. 63 Accordingly, the
61

Plaintiffs' Brief in Opposition to Defendant GIA' s Motion to Dismiss
Pursuant to Fed. R. Civ. P. 12(b)(3) and 12(b)(6) at 17.
62

The fact that GIA would require a claimant to sign legal documents,
particularly in the form of the Release Letter or the other agreements attached to
the Complaint, is not unreasonable. It would be unreasonable not to attempt to
16

Complaint does not state a claim for conversion.
B.

The Complaint Fails to State a Claim for Breach of Fiduciary
Duty

The Complaint alleges that "[t]hroughout their interactions with GIA,
the Zaretskys believed GIA to be a 'disinterested third-party' acting simply as an
'escrow agent,' holding the [diamond] until the issue of the competing claim could
be resolved." 64 The Complaint states that GIA breached its fiduciary duty of good
faith and fair dealing "as an alleged disinterested third-party ... by neglecting to
disclose [its] interest in the [diamond] as well as [its] status as an interested party
with respect to [its] relationship to" WGDC. 65
The breach of fiduciary duty claim fails for two reasons. First, the
Complaint fails to adequately allege a fiduciary relationship between GIA and

define the terms of the parties' relationship under these circumstances.
63

See Rezende, 2010 WL 4739952, at *4 (rejecting plaintiff's argument
that whether or not possession was authorized, defendant Citigroup's continued
refusal to tum over funds to plaintiff constituted conversion because "Citigroup
rightfully possessed the funds in the first instance .... Citigroup did not retain the
funds for its own benefit, nor did it do so in order to deprive [plaintiff] of the
funds. Rather, Citigroup was notified by multiple parties of competing claims to
the funds, and concluded ... to file a counterclaim in interpleader."); Trans-World
Trading, Ltd., 882 N.Y.S.2d at 687; Mehlman Mgt. Corp. v. Fong May Fan, 503
N.Y.S.2d 642, 643 (2d Dep't 1986); Bradley v. Roe, 282 N.Y. 525, 531 (1940).
64

Complaint if 25.

65

Id. ifif 46-47.
17

plaintiffs. The Complaint alleges that Zaretsky authorized his jeweler to submit
the diamond to GIA for appraisal and certification. This type of commercial
transaction ordinarily does not give rise to a fiduciary relationship absent
extraordinary circumstances. 66 However, the Complaint's allegations, including
those concerning plaintiffs' negotiations with GIA, do not describe extraordinary
circumstances sufficient to permit an inference of a fiduciary relationship between
GIA and plaintiffs. Instead, the Complaint describes what appears to be a baileebailor relationship between the parties. 67 Typically, however, a bailee only owes a

66

See Manhattan Motorcars, Inc., 244 F.R.D. at 215.

The Complaint refers to GIA as an "escrow agent." See Complaint if
25. '"To create an escrow agreement under New York law, there must be a[n] []
agreement under which the grantor deposits property with and relinquishes control
to an [escrow agent] with the subsequent delivery of the property by the [escrow
agent] to the grantee conditioned upon the happening of some event."' Anwar v.
PAAM Group, Inc., No. 12 Civ. 3420, 2014 WL 241041, at *4 (S.D.N.Y. Jan. 22,
2014) (quoting In re AppOnline.com, Inc., 315 B.R. 259, 274 (Bankr. E.D.N.Y.
2004) (quotation marks omitted) (alterations in original). However, the Complaint
does not allege facts sufficient to support the inference that an escrow agreement
was created, much less whether such agreement gave rise to a specific fiduciary
duty that was breached by GIA. See Gianoukas v. Campitiello, No. 09 Civ. 1266,
2009 WL 3270808, at *3 (S.D.N.Y. Oct. 13, 2009) ("The Amended Complaint
refers to Levy and Boonshoft as 'escrow agents.' But, just as calling an act an
escrow does not make it such, calling Levy and Boonshoft escrow agents does not
mean they were indeed escrow agents.") (quotation marks, citations, and
alterations omitted).
67

18

duty of ordinary care in dealing with the property entrusted to it. 68

Second, even assuming GIA owed a fiduciary duty to plaintiffs, the
Complaint's allegation that WGDC made over $350,000 in contributions to GIA, a
nonprofit corporation, is not, together with the other allegations in the Complaint,
sufficient to support a claim for breach of fiduciary duty. Said another way, the
suggestion that GIA is actually acting on behalf of WGDC is not supported by the
allegations in the Complaint. It is common sense that non-profit corporations 69
such as GIA receive contributions from a number of businesses within the industry.
However, the Complaint does not allege that WGDC made this
donation in secret7° or that WGDC is the only diamond or jewelry business that has
made contributions to GIA. The Complaint also does not allege that plaintiffs were

68

See Snyder v. Four Winds Sailboat Centre, Ltd., 701 F .2d 251, 252-53
(2d Cir. 1983).
69

See Complaint if 3.

70

In fact, GIA's receipt of WGDC's contribution was publicly disclosed
as evidenced by the document announcing the contribution attached to the
Complaint. In addition, "[ f]or purposes of a 12(b )( 6) motion to dismiss, a court
may take judicial notice of information publicly announced on a party's website, as
long as the website's authenticity is not in dispute and 'it is capable of accurate and
ready determination."' Daron Precision Sys., Inc. v. FAAC, Inc., 423 F. Supp. 2d
173, 179 n.8 (S.D.N.Y. 2006) (quoting Fed. R. Evid. 20l(b)). GIA's website lists
not only WGDC's contribution, but hundreds of donations from jewelers and
similar businesses, ranging from $5 million to $10,000. See
www.gia.edu/gia-support-donate-financial-contributor.
19

required to enter into agreements with GIA and that WGDC was not. GIA does
not claim an interest in the diamond and did not turn the diamond over to WGDC.
Instead, GIA invited plaintiffs to name them as a party in a suit to establish the
ownership of the diamond. Accordingly, the Complaint does not state a claim for
breach of fiduciary duty.

C.

The Complaint Fails to State a Claim for Intentional Infliction of
Emotional Distress
To satisfy the first prong of a claim for intentional infliction of

emotional distress, the Complaint must permit an inference that GIA engaged in
outrageous conduct. The Complaint's allegations fall far short of alleging such
conduct. "However unpleasant [GIA's] alleged actions may have been for
plaintiff[ s], none of the alleged actions was remotely outrageous enough to state a
cause of action for intentional infliction [of emotional distress], even at the
pleadings stage." 71 Accordingly, the Complaint fails to state a claim for intentional
infliction of emotional distress.

V.

CONCLUSION
For the foregoing reasons, GIA's motion to dismiss the tort claims

against it is GRANTED. A conference is scheduled for May 9, 2014 at 4:30 p.m.

71

Kiser, 2010 WL 286647, at *2.
20

Dated:

New York, New York
April 28, 2014

21

-Appearances -

For Plaintiffs:
William I Strasser, Esq.
Gregory D. Emond, Esq.
Strasser & Associates, P.C.
7 East Ridgewood A venue
Paramus, NJ 07652
[phone]
Fax: [phone]

For Defendant GIA:
Capricci Bilandal, Esq.
DLA Piper LLP US
300 Campus Dr., Suite 100
Florham Park, NJ 07932
[phone]

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